GRIEVOUS IGNORANCE OF ECONOMICS AND POLITICS (3 of 3)
(or The endless confusion of apples and oranges: PART 3)
When we the people through our government 1) placed many strong public-interest regulations on corporations, especially those that produce nothing but financial manipulations, and 2) imposed steeply graduated income taxes that took little from the poor and quite a lot from the very rich, and 3) took a strong governmental lead in guiding research and initiating innovative new business activities, the resulting unassailable fact is that 4) the middle class was large, well off and growing, 5) the poor were far less poor and were a much lower percentage than now, and 6) Great Gatsbys were rare exceptions.
There was little of this gaping income inequality that increasingly now sets the super-rich so far apart from the rest of us, fostering visceral deep resentment and sowing the same seeds of revolution which haunted our Great Depression years—until the New Deal’s strong governmental initiatives restored our living incomes and saved our collective social butts.
On self delusion
The only types who didn’t appreciate Roosevelt’s New Deal were those afflicted with extremist adoration of free-market capitalism and the screwball politics that sustain it. They’re still around, deluded as ever, but in modern times they’ve been joined by an equally deluded army of poor- and middle-class citizens who consistently vote against their own economic self interests even as their real income slides lower year after year.
What, are they crazy? No, these definably non-wealthy citizens are simply misled into voting for side issues—distractions—that stir their emotions such as, among other things, women’s reproductive rights including abortion, militaristic nationalism, flag worship, gay marriage and gun control. These generally struggling ordinary citizens vote for the candidates who lean their way on these diversionary hot-button issues, oblivious that the real big issue, which is not being voted on—not even noticed, is that giant corporations are gradually taking over the country and steadily shifting everybody’s wealth to themselves the super rich. In the vernacular, these deluded voters shoot themselves in their collective feet with each new election—and blame the nation’s economic decline on whichever party happens to be in power. Many don’t even recognize the decline.
The nature and scope of their blaming and self delusion is breathtaking. They obsess with bottomless resentment over thousands! of their tax dollars which they just know are being scammed by all those lazy welfare parasites, getting all those freeby food stamps and drawing all that unemployment insurance, who won’t get up off their butts and Go Get A Job! Ayn Rand buffs who never heard of Ayn Rand. They refuse to believe that the true petty cheaters on the welfare system are a tiny minority of that whole—and the whole is citizens like themselves, who fell on hard times—who so desperately need temporary help while, indeed, trying to find the jobs that grow so increasingly hard to find across America. Sadly, these voters tend to not see or believe that we’re all in this together, that we are ultimately responsible for the mutual wellbeing of all of us. Most have never been educated in civics.
At the same time, with ultimate irony and even fiercer obsessing, they love and angrily defend that runaway extremist economic system which so recently trashed our national economy to the tune of more than a trillion—a trillion—of our mutual tax dollars. All their terrible resentment and despising is focused on those lazy welfare bums—wasting thousands, maybe a whole million—not the Wall Street criminals who instead of going to jail got bailed out by a trillion tax dollars from the public till—their tax dollars, our tax dollars, yours and mine. What’s the difference between a thousand, a million, a trillion?
What, are they crazy? Yes. Their madness results from that most common error called bipolar thinking: they perceive two opposite and utterly opposed things—and stop thinking right there. It’s either this or that, there’s only two choices. They do not perceive that a mere two diametrically-opposed options is never the only choice. They don’t realize there’s always a third option, somewhere off at some angle from the continuum. Usually there’s also a fourth and a nineteenth option—how many options are perceived depends on the set of one’s mind, whether it’s open or closed. Closed minds both rich and poor are able to envision two and only two options for our economic affairs—either capitalism or communism—“because,” they pine and sigh, “that’s all there is.”
That is not all there is. For example: among the several alternative ways of exchanging goods, services and value there is a perfectly splendid and time-tested option called employee-owned co-ops. It is limited in size, co-ops reasonably competing with each other to hold prices down and serve their local-regional populations in the common interest of the entire nation. But closed minds cannot conceive this—they’re locked into a bipolar mode where the only choices are capitalism or socialism-cum-communism. Welfare is bad, Wall Street competitive greed is good. Such mindless uncritical thinking strains and fuzzes the boundary between crazy and sane. It grievously degrades economic victims’ ability to perceive the facts as they truly are—or to vote with real understanding.
On the record, in full view of official governmental statistics for the past seven decades, these are facts: Arthur Laffer was wrong in his self evidently silly view that cutting taxes will increase tax revenues. He was as wrong as was the looney economist Friedrich von Hayek, the ludicrous and over-sexed Ayn Rand and her pompous disciple Alan Greenspan, the theorizing economic theorist Milton Friedman and his entire stable at the trenchantly misguided Chicago School of economics, the over-confident opinionated Reagan-Bush crowd and their distressingly, increasingly loony, benighted descendants and comparable ilk of fuzzy thinking economic theorizers of the past seventy years and down to the present day.
None of this would matter if their stupid theories didn’t so verily harm so many people.
Help Others. And seek to attain Knowledge—which may increase Understanding, which might lead to some Wisdom, which will almost certainly lead to better Helping Others.
An X-Y graph of economic-political models
To bring this matter to a close, I want to summarize the models discussed above with a simple graph showing how deeply economic systems and political options interrelate. The sequence of presentation will be 1) communism, 2) socialism, 3) mixed economy, 4) moderated capitalism, and 5) free-market capitalism.
Imagine a graph shaped like a big L. The vertical line is the political scale—at the top is freedom, at the bottom is tyranny, oppression, slavery. The horizontal line is the economic scale—on the far left is total governmental control, on the far right is total absence of governmental regulation or control. Drawing the five economic-political models on the graph illustrates the spectrum of economic-political possibilities as a large bell curve (but wide at the bottom, without the customary bottom-flared bell shape).
Model 1. Communism (extreme bottom left on the graph)
Economic features: Government owns or controls everything, plans everything, subordinates everything and everybody to the priority of its grand plan. In theory it is supposed to receive labor equally from every citizen and split the pie of wealth equally back to all citizens. In reality communism never came remotely close to equality for all.
Political features: In every country where it was ever implemented it survived only through extreme military suppression. Totalitarian rule was imposed because the economics of communist theory are so contrary to human nature that most people will not support it of their own free will, they must be forced. Murderous oppressions on an unprecedented scale have been perpetrated in the name of this utopian idea as if the idea itself were more important than the people it was supposed to help.
Example: The communist model passed from existence with the fall of the Soviet Union and the passing of Maoist traditions in China—except in North Korea where it remains, insanely, in grievous full force.
Model 2. Socialism (halfway between left and center; halfway up the page)
Economic features: The government owns or controls most major means of production—especially monopolies and too-big-to-fail corporations—but leaves many other activities under private ownership. Government conducts major planning and regulation, and holds privately-owned production and commerce to consistent fair standards. Its major goal is equal economic security for every citizen through taxation and wealth transfer programs such as social security, social insurance and free health care
Political features: Typically free and democratic, this model places high priority on both political and economic rights. Government enforces the laws regarding features such as heavy taxes to spend on a broad range of social services that ensure economic security for all citizens. With assurance that no one must live in poverty, no one who is able to attain wealth is prevented from doing so.
Example: The Scandinavian countries most closely reflect this model, though versions of it are found worldwide. In the United States examples of socialistic programs include the U.S. Post Office, public road construction and maintenance, food inspections, Social Security and Medicare. Many Americans, uninformed of the major differences between communism and socialism, mistakenly fail to distinguish between the two models.
Model 3. Mixed economy (centered at the top of the graph paper)
Economic features: This mixed model draws the most desirable economic features from both the left (economic security) and right (competition) to construct the fairest, most equal economic structure possible. As an example from the right: where true competition exists under capitalism, prices are held down for consumers (though corporations constantly try to eliminate competitors whose existence forces them to constrain their consumer prices). An example from the left: use of planning, a favored tool of socialism and communism, enables government to set goals, manage budgets and activities toward achieving the goals, and avoid the stock market crashes that are inevitable under unplanned laissez faire capitalism. A mixed economy typically encourages cooperative employee ownership of workplaces, requires paying employees a living wage, and outlaws financial speculation that produces nothing but profit. It limits the size to which private businesses may grow, and comprehensively regulates private enterprise.
Political features: Highly democratic, its highest values are personal freedom, human rights, and economic adequacy. Its paramount goal is “what’s best for all the people.”
Example: No known examples of this model exist today, though several of its features are variously reflected in Germany, Scandinavia, Spain and other countries.
Model 4. Moderated capitalism (halfway between center and right; halfway down the page)
Economic features: Private ownership of the means of production is a high priority. Public-interest regulation of private enterprise is a low priority. It is widely assumed, without verification, that unplanned market competition’s “invisible hand” will produce the best of all possible worlds, like Pangloss mentoring Candide. Monopolies and too-big-to-fail corporations are permitted to merge and grow to multi-national dimensions uncontrollable by any government. Government operates much of its large bureaucracy but increasingly contracts public governmental functions out to private corporations.
Political features: Largely democratic but trending toward oligopoly accompanied by increasingly extreme inequality of wealth, steady decline of the middle class, and increasing impoverishment of ever greater numbers of citizens. Unconstrained corporate lobbyists wield decisive influence over legislative, executive and judicial branches of government..
Example: Great Britain, Australia, Canada and the United States are prime examples of this model, though the U.S. is trending toward Model 5.
Model 5. Unrestrained free-market supply-side capitalism (extreme bottom right)
Economic features: Corporations control government. Government has no regulatory powers and “owns” nothing but a few agencies which administer closely circumscribed public functions. Untrammeled corporate commerce reigns supreme and most areas of “private” life are controlled by the corporations that manage to grow the largest. A tiny minority of colossally-wealthy people own the corporations and thus control essentially everything. The remainder of the population is poor, struggling endlessly to obtain the basic needs of life which is brutish and short. A middle class no longer exists.
Political features: This model, like communism, is down at the political bottom where tyranny, oppression and slavery are commonplace. The “public interest” is deemed to be whatever the dominant corporations think best for untrammeled corporate commerce and further corporate enrichment. Citizens’ rights are a non-consideration, personal freedom is a non-priority that is coincidental in its rare occurrence. The highest civic value is commerce—unregulated, unplanned economic pursuit of profit by corporations that grow ever larger. Nothing else has political value.
Example: No nation has ever achieved a pure form of this model though, in several respects, Nazi Germany, fascist Italy, Spain under Franco, and various South American countries at various times have came close.
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“Since Roosevelt, they are all pygmies.”
